Saturday, January 1, 2011

10 (or more) gripes about automotive-related businesses in America: Are you serious?

I'll start out by saying that I have a huge problem with the vast majority of people in any business relating to the sale, repair, and maintenance of automobiles.

Here's why:

1) Everyone in that industry assumes (often correctly) that you don't know anything about how a car works. Perhaps not everyone's interested in doing their own brakes, changing the oil, garage engine swaps, suspension upgrades, or even basic maintenance, or troubleshooting what's wrong with a vehicle, but knowing how and what is done can be gleaned without ever lifting a wrench. A read through the factory service manual (most cost somewhere around $100) can save you literally thousands of dollars worth of "bogus" charges and mechanic/shop owner's BS.

2) Most places tend to act like they are doctor's, and you wouldn't question your doctor's advice, would you? Most places invite you to get a second opinion, because you have a 1 in 100 chance of actually finding someone who knows precisely what's wrong with your car and is honest enough to tell you. In many cases, highly 'rated' shops are the worst offenders.

3) Consumers are under the mistaken impression that the dealer knows more about their car than anyone else, and that the dealer mechanics are more highly trained. While in some cases, that is true, the vast majority of dealer mechanics go to an ASE tech school for maybe a year and get really good training. That doesn't mean they remember any of it, or know how to call it up when necessary. The vast majority of dealer mechanics apprentice at the dealership doing tire rotations and oil changes (Usually making not much over minimum wage), and the dealer charges can shoot as high as $150 an hour, for a $10/hr guy to change your oil, maybe not remembering to tighten the drain plug entirely (it has happened, literally).

4) Automotive manufacturers do nothing to dispel these myths about dealers. They are quite happy with the relationship, and will do absolutely anything to ensure continued sales of whatever it is they are selling, and generally doesn't regulate dealer selling price for parts,

dealers are more than able to charge 2-5 times list on common service parts (Case in point, my local BMW dealer charges $36 for 1 single Bosch twin-fire copper sparkplug. I can buy a full set of the exact sparkplug from my local auto parts store for $3.99 each.

The aforementioned fear and misbelief drives people to accept this usury, BMW OEM or OES parts are great, many aftermarket stock replacement parts are equally wonderful. BMW is by far not the only consumer abuser, Infiniti (Nissan) is also pretty bad these days.

5) Every step of the process, from the first time you walk on the lot, to the time (often 3-6 hours later) when you drive off with your car (or the contract and a scheduled pickup time) is designed to make you accept this usury. The most common dealer tactic is to prey on your pride first, then switch to being outright degrading. Most people who sell cars for a living are not the type of people you typically choose to do business with, drug addicts, ex-cons, anybody who can't find anything else.

It's feast or famine, if you sell cars, you can make pretty decent money (around 100-150k for a sales manager at a dealership, including overrides on every sale made while on-shift), or you can starve. Imagine most sales guys are pretty hungry.

From the time you walk on the lot, people who are master con-artists are sizing you up and deciding how to approach you. I wish people could see the side of these guys that comes out when no customers are around.

5) Local mechanic repair shops, smog stations, both test only and test/repair.

A typical consumer has about a 1 in 100 chance of finding an honest mechanic. The same is true with smog shops. I recently had an experience with a smog shop that is all too typical. Basically, if you walk into a shop knowing anything at all about cars, you get immediately lowered priority. Just like walking into a dealership, you are getting sized up the moment you walk in. If you seem like an easy mark, they are all friendly, the minute they get the sense they can't steal you blind, all of the sudden they are too busy to help you.

6) Most mechanics don't have a high school education. This is changing somewhat these days, as a high school diploma and possibly some sort of technical school is a requirement for many shops, but at least 10 times as many don't have any such requirements. Most mechanics start out working for someone else, and eventually hang out their own shingle as a proprietor. 5-10 years of experience is a good amount to be able to handle the majority of vehicular repairs.

7) Book rates. There's this book, or set of books, published annually, that lists the 'rates' for various repairs. This has nothing to do with time worked. I know a mechanic who bragged to me that he once billed 17 hours (@$85 per) for a single 8 hour day worked. The mechanic working for someone else, gets paid for the job at a reduced hourly rate for the hours defined in the 'book' (usually a CD/DVD or online software like Alldata).

For instance.. let's say o2 sensor replacement says .5 hours in the book. The mechanic does it in 10 minutes, including time to lift the car up for access to the exhaust system (although sometimes that's not even necessary, and they are visible when you look under the hood). The mechanic gets paid for a half an hour, say $12.50 ($25/hr for an experienced mechanic in many markets). The shop turns around and bills you 1/2 hour labor @ $85-125 per hour, everyone makes money.

Here's where it gets better. Book rate 'usury' is based on an established set of rates, by a third party. Many shops actually overcharge even the already excessive book rate. I just had a shop attempt to charge me 1.5 hours of labor for an o2 sensor. When I argued about it, knowing the 'book' rate, the labor charge got cut down to a more reasonable number. The mechanic literally tried to charge me labor time for driving to a mexican restaurant down the street, bringing lunch back, and eating it, while having a friendly 45-minute lunch, chatting me up the whole time.

8) Mechanics have to spend so much on their certifications and tools, that they have to resort to theft and usury just to make ends meet? I call BS on that one, straight up. I have bought a complete set of shop tools before, and other than the very expensive ones, made by companies like Snap-On and MAC tools, do cost a small fortune. Far more than they are worth. You know how these guys get hooked on them when Craftsman will more than do the job? Three ways,

first, they offer financing. A $20,000 roller tool chest/cabinet that's worth $50k after it's filled with overpriced tools, looks attractive when a guy can have it for $200 a month. They can't finance 5k worth of Craftsman tools like they can Snap-On. The second way is by offering things like a student discount. The third method is the same way the industry sells you on stuff, pride. Especially in Southern California, where people all over the place brag about how much they spent on whatever. Back on the east coast, most of the folks I know and love brag about how good of a deal they got, not how much they overpaid.

I love great tools as much as the next guy, but I can tell you that for $300, I can have 98% of the tools necessary to do just about anything on a car. For $1000, I could do a complete overhaul, sans machine work, including several pricey specialty items for at least one car make (which is common for most home automotive enthusiasts). Most mechanics pay off that $20-50k in tools within 3 years, many do it in less. How does that compare to the 3-500K in debt that a doctor incurs just for schooling and has to pay a huge malpractice insurance premium whether they ever have a claim against him/her or not? It doesn't. There are many other professions that incur a huge debt to get into. Aviation mechanics are required to have a lot more certification and tools.

9) Outright theft is rampant, and largely unnoticed, and then often not prosecuted. Back when I didn't ever touch my own car, many years ago, I had an extremely reputable shop charge me no less than $12k to fix a number of long-ignored, somewhat difficult maintenance items on a BMW 750iL that cost $7k originally. Had everything been done as paid for, I would have only called it my fault for accepting the deal. It was over the course of 3 visits at about 4k per visit, claiming to do some major maintenance work. It was a very expensive lesson, when the very same items got looked at by a shop 3 months later, and were found to be completely un-repaired. I will never forget that experience. My fiance took her still-under-warranty Honda to the local dealership for an oil change, against my advice (you can't always teach people by explanation, they have to see it for themselves) and got informed she needed new brake pads in the front, for $300.

I can tell you personally that for a mechanic with a car lift and air tools, after the 5 lugs for the wheels come off with an air impact wrench, There are two caliper pins that come off, and the brake pads slide out after removing the caliper from the bracket. I can do it without a lift in any driveway (it doesn't even have to be perfectly level) in about 30 minutes, both sides, including spreading the caliper with a large pair of channel-lock pliers.

The other 'special' tools you need for the job are a flat-head screwdriver and a basic wrench set (gear wrenches are a huge plus, and if you fork over $80 for a nice set, they will get used every time you open the hood). New pads on average run about $45-60, and that's if you don't buy them for $20 from a place like rockauto.com. If you're going to replace 3 year old pads, you need to replace the rotors. 'Turning' or resurfacing the rotors takes metal away, and while it may provide a nice surface for your pad, you want your brake rotors to have as much metal as possible, but the full explanation of the engineering principles behind braking is a topic for a different conversation.

If you buy your rotors from the dealer, they will charge you a small fortune for machined hunks of cast steel. Always buy the cheapest rotors you can find, you will find that these hunks of steel are all basically equal. You don't get anything for your money buying expensive hunks of disposable steel. Dealers, auto-parts stores, and aftermarket vendors rely on people's ignorance of the physics behind braking and the purpose of brake rotors, to imply that paying $150 for a single brake rotor when you can buy one for $28 actually makes some sort of sense.

I check all my various parts stores when I need to buy anything, to figure out who has the best price, including shipping or tax (or both in rare cases), and I often find the shipping cost for brake rotors far exceeds the price including tax for locally picking them up. This isn't always the case, shop around.

10) Myth smithery at large: If you have a car, and you're 'enthusiastic' about understanding and working on it, you have a far greater vested interest in maintaining or fixing it properly, and at minimum cost. Ergo, you are going to purchase the tools you need to properly diagnose it, these days, that's usually a OBDI/II code reader of some type, and a $10-20 digital multi-meter. Between those two tools, you can test/diagnose most of the electrical components in a vehicle, and obtain the excellent information contained within the OBD (On-board diagnostics). Here's the problem, cars are complicated systems, and in many cases, the information isn't perfect, although if you have a code for an o2 sensor, replacing it generally clears the code (and increases your fuel milage by 10-30% depending on how bad it runs with a failed one). They last 60-80k miles usually, so replacing them by 80 or every 80k is very recommended.

11) New parts, used parts, salvage yards, and take off parts. What most mechanics do when you need something for your car is order it from his local auto-parts store or distributor, and the distributor delivers it for free in his Ford Ranger or similar tiny truck, and the mechanic marks it up 50-100% and writes down the new number on your bill. I don't know about everyone else, but I shop around. The old excuse is let the guy make a little on the parts, I can't buy it as cheap as he can. In general, the re-sale business is predicated on entities buying something for less, (usually in some volume) and selling it at a competitive markup. This is a tried and true business model, that works. For $50 on a $120 item, I'm happy to spend a little time shopping and order the parts I need. Most people don't go into a shop knowing what needs to be fixed, much less what it takes to fix it, or what parts to order.

Many parts can be purchased used but functional from salvage yards, or even better yet, although many of them have taken to charging 50% of retail for parts with 60-120K miles on them. You have to shop around there as well, just like anywhere else.

Take off parts are something different entirely. Let's say you go into a shop and ask them to install an aftermarket exhaust. They remove your stock one, install the aftermarket one, and unless you specifically ask, keep the old parts. Dealers are the worst this way. The mechanic then takes the money he made from overcharging you on labor (book rates are an overcharge, it's labor charged for labor not performed, and most mechanics who have been working for two years can do the majority of book rate jobs in half the time specified in the 'book'), and then take your perfectly functional, relatively expensive parts, and sell them on craigslist, ebay, or an enthusiast forum for some good undocumented cash. I recall talking to a mechanic at an Infiniti dealer who bragged about making over $25,000 in one year like that, and showed off his expensive toys to prove it.

Most people assume that if someone's does it for a living, they know more about it than you do, this is not really true. You know instantly if something's wrong with your car, you can feel it through the floorboards, or in the throttle/braking response, just having low pressure in one tire can cause the car to wander, forcing you to correct as you drive in a straight line. Looseness in the steering feel is due to worn tie rods, or other sacrificial suspension joints such as bushings, ball joints, etc. Most all of these are designed to be replaced relatively easily, and at a relatively minimum cost because they are WEAR items. Really, every single thing on a car is a wear item, but some much more so than others. The methods for checking these things including wheel bearings, largely revolves around wiggling the steering wheel around while someone else looks under the car to see where the joints have 'play'. This isn't rocket science, it's not even automotive engineering, and quite honestly is a lot like playing with an erector set and looking for the weak link. An untrained eye if looking at the joints closely, can see where the play is, and in most cases, visual inspection is the only diagnostic method available.

So, what's up with this industry? We are so reliant upon the automobile, and yet it is often our collective blind spot? Don't we all have a vested interest in making sure we're not getting shafted? Where's the value? Why is it if someone smiles and gives us a false sense of security, we accept financial buggery as a matter of course?

Let's look at this from an energy exchange perspective, favored by the 'Burners' (People who attend Burning Man).

I work at a decent salary, and I also do a certain amount of side work, for an hourly rate. Let's say that rate is $75 an hour. I also have a retainer job that adds a modest amount monthly, and doesn't always require attention, but that's special, and not usury by any stretch, I am generally relatively generous about billing for overages.

In an energy exchange, I put out a certain amount of energy. Usually for an hour billed, it's about an hour and 15 minutes of fairly intense mental concentration, using every tool at my disposal, and my not inconsiderable experience, gained from starting out 'building computers' 20 years ago, and being a unix sysadmin and adding quite a bit of networking/security skills over the years, all gained via mentors, self-teaching via O'Reilly books, classes, and search engines/forum and mailing list posts, etc.. The amount of energy behind that hour is immeasurable by me, and quite a bit more than that hour would indicate.

Now, I feel, that I offer a distinct value to my clients. I'm fast, experienced, and a 'pit-bull' when it comes to figuring out something that's stumping me. In order to justify myself to my own code of ethics, if I don't put out an hour's worth of work, I don't bill an hour. It makes sense to me and my clients.

Even more importantly, while it used to be that mechanics were relatively inexpensive, fair, and basically honest folks, those days are long, long, gone. Every hour I invest in my own knowledge and experience with my car is worth it. If it takes me 2 hours to do something that a shop could do in one hour, it's still a good investment. If I made $450 per hour, I would drop it off and pay the $125 an hour all day long, but when 2 hours labor is more than I make in a day at my considerably more complex and rare skill-set occupation in a day, than the energy exchange is off-balance. The entire monetary system is about equal exchange of energy.

Why is it that American business has the saying 'It's nothing personal, just business' as an excuse for lying, stealing, and generally screwing people in the name of the almighty dollar? Part of it, is that we don't have time to educate ourselves, or are afraid of the learning curve. Part of it is that we buy into the expense of having our own mobility, ego-fulfillment, and this perceived self-reliance that allows. Part of it is that cars are FUN to drive. There's something intensely satisfying about being able to hurtle through space much faster than any human could on any human-powered transportation. Why do people who don't have the skill or interest to drive at 170MPH properly on a racetrack buy cars that are designed to be able to? It's a blast! I totally get it.

Ludicrous maintenance costs are accepted by the American consumer, unless you buy a Toyota and for the high line brands, (anything that sells for over $50k new) it's a matter of course. Every car has it's special tricks and issues, and the occasional specialty tool, but all internal combustion engines needs similar maintenance, and have nearly identical diagnostic methods.

Why is it that in every other industry, we have an expectation that value received is in some way commensurate with dollars spent? Why do we accept usury, theft, and lying from automotive industry businesses and why is it we have laws to protect against that sort of stuff, but we're all still getting shafted? The answer is sloth, complacence, and the fact that it's largely a unified front. When I find a good mechanic (I've found 3 in my lifetime) I refer them all the business I can. I look for guys willing to bill me on hours worked, not book rates, and in the rare circumstances where I simply cannot deal with the job myself, I will take it to the professional, who provides what a professional should provide:

1) Value. I take it to the pro, because he can diagnose and resolve the issue in less time than it would take me to do it myself, and because he has the tools or diagnostic equipment to do the job cheaper, faster, and better than I can myself.

2) Honesty. In anybody I do business with for literally anything, honesty is a must. I control that by voting with my wallet every single chance I get. I will happily speak up loudly to call out those who do not do honest/fair business.

3) Experience. I've worked on 25 cars in my life. Your average mechanic sees that many in less than 2 weeks. 3-7 cars per day isn't uncommon for a good mechanic who works a little more than an 8 hour day.

The unfortunate reality is that none of these things are a given. When you go to a shop these days, mechanics tell you that you need to replace super expensive items, pulling these answers out of their asses, and most people go for it. A recent example is where I'm being told I need to change my catalytic converters on my 16.5 year old BMW, because the HC's are too high.

The reality is that the engine was running rich due to knock sensors being bad, and the ignition is incomplete because the coil packs are 16.5 years old and 154,000 miles old, and the combination of under-hood heat, vibration, and petroleum products takes it's toll on copper-wrapped ignition autotransformers (coils). A great article explaining ignition coils is here:

I tested the coils individually and found them either just at the upper limit of the acceptable range of impedance (.8 ohms) or over it. I bought a $20 digital multi-meter to test this, it took about 30 seconds for each one times 6 and about 5 minutes to open the hood, hook up the light, and remove the plastic cover from the top of the engine. BMW factory coils are over $80 a piece, without the boots to connect them to the spark plugs, but if you don't require a BMW part number stamped on them, FCP Groton sells a set of 6, including the boots for $150.

Obviously, this entry has taken on a life of it's own. I probably could have written no less than 10 separate articles, and it probably would have been a little easier to follow, but sometimes you just have to dump all the passion into one shot. I believe I've been typing for a little over 2 hours now, so it's time to close!

3 comments:

Thank you for taking the time to write this article. I think it's important that the consumer is educated on the status of automotive repair and maintenance in the United States. Being in the industry I've experienced first hand many of the frustrations you've outlined here. There are still many ethically and morally sound businesses operating in the US and these are the backbone of our industry. The consumer just needs some clarification on how to identify them.

The industry is growing at a rapid pace and just the aftermarket automotive industry alone is projected to grow to $329 billion by 2015. Problems like you have addressed here are running rampant and will continue to grow until someone or a group of people expose the truth.

I think there needs to be a council dedicated to the industry that focuses on honesty and integrity in automotive repair and maintenance. Call it CARM perhaps, Council for Automotive Repair and Maintenance. To my knowledge nothing like this exists. There's a very mall council out of Maryland (http://councilofautomotiverepair.com) that's limited to Maryland, and there is the AAIA (http://www.aftermarket.org/), and that's focused more on the growth, supply chain and technology side.

I wish you a happy healthy and prosperous New Year and good luck with the ignition coils. They are currently in our shipping department and will be leaving our facility Monday. If you ever have any problems, questions, or concerns you can contact me directly at scottd@fcpgroton.com.

Firstly: Thank you for taking the time to read and validate my findings, not everyone takes the time, this is an issue that screams for action.

Secondly: A lot of people have talked about the auto industry for years, and there's (what I believe to be) a fantastic movie from 1999: "Suckers".

Of late, there's a former car dealer who's writing a fairly informative article about the parts of the auto industry we don't really see first-hand. Usury in this industry isn't just B2C, it's B2B as well:

http://www.theautochannel.com/news/2010/03/02/467635.html

Lack of honesty and integrity in business isn't just at the dealership and mechanic level, but in the finance, the laws, none of which are currently doing anything to stem predatory lending practices, except in the mortgage business because this sort of rampant theft and graft isn't considered economically threatening like the mortgage industry.

It's my opinion that people like FCP Groton and a few rare others both deserve my business, and hold true to the spirit of ethics and the value proposition.

"Made in America" should not mean "Bend over and take it because we'll guilt you into believing that doing otherwise is unpatriotic.", "Yankee Ingenuity" should not be a euphemism for "Figuring out how to screw people over in a way they can't sue you for it.".

American business can and will compete, but let's face it. Profits soar when your sales tactics are based on psychology (lying and manipulation) rather than product or service superiority (value).

It is a fact that you can explain yourself until you're blue in the face, and even if your argument makes sound logical sense, people can be pushed around using psychological and emotional tactics far more easily. It's the equivalent of psychological rape with the accompanying victim-guilt that prohibits most from ever exposing the crime.

Companies like yours embody the spirit of ethical capitalism. I for one, will happily vote with my wallet for large and small businesses alike that maintain ethics in business, and excellent customer service.

I also have a mechanic in my local area I can definitely recommend as both honest and ethical:

Precision Tech Motorsports

13368 West Washington BlvdMarina Del Rey, CA 90066310-822-4566

Alex, like anybody else, is great to work with if you respect his time,and is one of the few mechanics I know who don't charge book rate.

He also doesn't turn you away just for bringing your own parts. He will be happy to order the parts for you if you prefer, but there's noprejudice if you don't. He specializes in anything ever made by Porsche, but he's pretty handy with just about anything. Any time I pay for an hour of his labor, I feel it was money well spent for his experience and knowledge. He also doesn't leave random things loose, ever, he's methodical and makes sure that anything he touches is right.

Another spectacular local businessman is a fellow named Darin at West End Alignment in Gardena, CA. He does the most meticulous and accurate alignments and cornerweighting in a beautifully functional shop using no computerized alignment tools.

http://www.yelp.com/biz/west-end-alignment-gardena

He charges good money, but provides exceptional service and value,schedules and keeps appointments with laser-accuracy several weeks in advance, and is the go-to guy for quite a few enthusiast groups anywhere within a tankful of gas.

I absolutely love the idea of CARM and I would put my full support towards helping with something like that. I also want to start an automotive referral service, so when these rare gems appear, we can send them as much business as they can handle.

I wish you guys over at FCP Groton a very happy, healthy, and prosperous New Year for all of you and yours, and thank you for your kind comments.